Foxconn Passing Salary Raises on to Apple, Sony, Others

Foxconn is addressing the near-dozen worker deaths on its Shenzhen campus by raising wages considerably. It expects "the global food chain" to help with this expense, which means passing fees to Apple, Sony, Dell and other customers to defray some of the costs.

Foxconn has a new plan for ending the ongoing worker suicides that
have plagued the electronics manufacturer since the start of the year.
The plan includes significant wage increases, the burden of which
Foxconn plans to pass along to customers such as Apple, Dell and Sony.
According to the Financial Times,
Foxconn announced June 6 that in addition to its previously announced
30 percent worker wage increase, set to take place July 1, "workers who
reach certain performance standards would also get another 66 percent
pay rise from October 1."

In a prepared statement, Foxconn added that the "monthly wage for all
first-line employees and their line leaders and supervisors in Shenzhen
will be elevated to [approximately $290] as early as October 1, 2010"
if workers pass a three-month evaluation period.

Current worker salaries have been reported to be approximately $132 a month,
the legal minimum wage in China, according to the Wall Street Journal.
According to a number of sources, workers at Foxconn, also known as Hon
Hai Precision, generally work up to 12-hour days and can go weeks
without taking a day off. Many are said to accept overtime hours to
help supplement their pay.

Since the start of the year, at least 12 workers have reportedly
attempted suicide, most by jumping from buildings on the extensive
Foxconn campus; two young men are said to have survived their falls.

According to reports, Foxconn is also looking into automating repetitive tasks as a way of better managing costs.

Apple - whose iPad and iPhone are assembled by Foxconn - as well as
Dell and Nokia have each released statements addressing the worker
deaths and insisting on the seriousness with which they're taking the
situation. Now, says Foxconn, it's time for them to take on some
financial responsibility as well.

While not specific about how its additional new costs will be shared,
FT reports that Foxconn stated, "We are applying international
standards now. The time has come for the global food chain to face
these issues."

Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.